惠普与康柏并购——3

building

tomorrow’s leader

today

september 4, 2001

deal summary

?$25 billion transaction value ?stock-for-stock merger ?fixed exchange ratio: 0.6325hp share per compaq share ?

expect substantial accretion to pro forma eps in first full fiscal year (2003)

?closing expected 1h02? 5 compaq directors to join hp board ?

leadership:

–carly fiorina chairman & ceo

–michael capellas president

a shared vision

of what customers want

?solutions capability ?

product leadership ?services delivery

?ability to manage complexity ?

open, market-unifying architectures

?innovation and invention ?

choice

what we can deliver to customers

?

solutions strategy ?

leadership across markets –enterprises, smb & consumer

?

leadership across products –IPS, IT infrastructure, access, storage, services

?

best understanding of customer challenges

–industry standard to high-end

?defining new open architectures ?

culture, values, invention

value creation for shareowners

growth drivers:

?strongest solutions capability ?#1 positions

?partner of choice ?brand

?services, storage and software ?

imaging and printing

value drivers:

?scale

?$2.5b in expected annual cost synergies

?substantially accretive to pro forma eps in first full fiscal year

?strengthens direct and channel models

?

management depth

accelerating a common strategy

transformation of:

?customer experiences ?employee experiences ?business processes ?industries

?life experiences

enabling transformation

enabling

intelligent, connected devices and environments enabling transformation

enabling e-services

enabling always-on

internet infrastructure

challenges ? a massive integration effort

? a difficult overall environment

?in the midst of reinvention

?synergies and headcount

?combining cultures

deep, experienced

management team

webb mckinney

jeff clarke

integration office

bob wayman

chief financial

officer

printing &

imaging

vyomesh joshi

access

devices

duane zitzner

IT

infrastructure

peter

blackmore

services

ann livermore

michael capellas

president

carly fiorina

chairman and ceo

comprehensive

integration

plan

?led by webb mckinney and

jeff clarke

?decisive, aggressive,

comprehensive

?early decisions made

?key managers identified,

retention plans in place

?leveraging outside expertise

?protect existing business

sales force

integration

?evolution of existing go-to-

market structures

?customer and competitor-

focused model

?similar organizational

structures

unique scope

and market

coverage

enterprise

?architecting every enterprise

?market-unifying architectures

?partnerships

small/medium business

?#1 in industry standard

?tailored solutions

?channel and direct capability

consumer

?leading consumer IT business

?excellence across categories

?brand and retail presence

1$23b IT infrastructure 3

$15

services

1$201$29access devices revenue rank*

estimated combined

revenues, trailing four quarters

leadership and balance across the business

*based on year 2000 data; source: IDC, company data

printing & imaging IT infrastructure:

leadership products

?highly complementary fit ?

best products across key growth categories ?

deep understanding of customer complexity ?

broad expertise in industry standards

?solutions-selling opportunities ?

leadership in open architecture transition

challenges

?multiple architectures

?low-end pricing/competition ?

customer transition

action steps

?speed path to IA-64

?merge and integrate r&d ?leverage r&d investment ?

reduce operating cost

IT infrastructure

access devices:

leadership is essential

?redefining Internet access ?

next-generation distribution model

?creating an advantaged cost model

?commercial & consumer leadership

?creation of new categories ?

engineering & design innovation

challenges

?highly competitive pricing environment

?direct distribution pressures ?

multiple brands

action steps

?improve overall cost structure ?capitalize on compaq’s direct distribution channel ?

crisp brand transition

access devices

services:

breaking into the top tier

?

third largest worldwide ?profitable and growing ?

substantial resources ≈15,000 consultants ≈10,000 outsourcing ≈40,000 support

?global services delivery ?experience curve ?

strong in mission-critical, industry standards, key verticals

?

deep partnerships

challenges

?front-end consulting ?evolution of outsourcing ?filling out the solution set ?

scale and profit improvement

action steps

?capitalize on partner of choice status

?rationalize IT systems and processes

?build presence and mind share ?

vigilant focus on customers

services

imaging and printing:

the preeminent franchise

?massive installed base ?

leadership across commercial and consumer

?high-margin, recurring revenue ?

expanding into adjacent markets

–commercial printing –digital imaging

?

strong patent portfolio

a more balanced revenue mix

imaging & printing

41%

access 21%

enterprise 19%

services 19%

total: $47 billion services 18%enterprise 34%

total: $40 billion imaging & printing

22%

access 33%

enterprise 26%

services 19%

total: $87 billion

access 48%

hp compaq

combined

*All data based on estimated trailing four quarters. Source: SEC filings, press releases, and company estimates.

summary of expected cost synergies

$2,500

total $250indirect purchasing $125

marketing

$425r&d $600cost of goods and services $475sales $625admin/IT

ebit impact

(run-rate in q2

fy04)

category

workforce reduction ≈15,000

source: company estimates

expected synergy timetable

?fy2002* –$390 million ?fy2003 –$2.0 billion ?

fy2004 –$2.4 billion

*partial year

source: company estimates

financial impact

?

expected to be accretive to pro forma eps in first full fiscal year based on planned synergies ?

estimated to be dilutive to pro forma eps in first quarter of combined operation and

accretive thereafter based on synergies

operating model

revenue growth

at/above industry growth by segment

gross margin 24.9%25-27%mix, utilization, synergies operating expenses 20.1%15-17%reflects synergies

operating margin 4.8%8-10%net margin

4.1%

6-7%

reflects blended tax rate

pro forma combined*long-term target

as % of sales

comments

*based on trailing four quarters; excludes one-time charges

a strong balance sheet

cash & equivalents $7,069total debt

7,607book equity

25,611market capitalization

66,648

ratios

total debt/book equity

29.7%total debt/market capitalization

11.4%

balance sheet

pro forma combined*

*based on latest reported quarters

our partners, employees and communities will benefit

?

long-standing commitment to partners

?

trust, respect, integrity and opportunity for employees ?

emphasis on community and corporate responsibility

building tomorrow’s leader today

?$87 billion combined revenue ?

leadership across markets ?leadership across products ?$2.5 billion in expected annual cost synergies ?go-to-market engine ?global footprint ?intellectual property ?leading global brand ?

the new hp way

forward-looking statements This document contains forward-looking statements that involve risks, uncertainties and assumptions. All

statements other than statements of historical fact are statements that could be deemed forward-looking statements. For example, statements of expected synergies, accretion, timing of closing, industry ranking, execution of integration plans and management and organizational structure are all forward-looking statements. Risks, uncertainties and assumptions include the possibility that the market for the sale of certain products and services may not develop as expected; that development of these products and services may not proceed as planned; that the transaction does not close or that the companies may be required to modify aspects of the transaction to achieve regulatory approval; or that prior to the closing of the proposed merger; the businesses of the companies suffer due to uncertainty; that the parties are unable to transition customers, successfully execute their integration strategies, or achieve planned synergies. Other risks that are described from time to time in HP’s Securities and Exchange Commission reports, (including but not limited to the annual report on Form 10-K for the year ended Oct. 31, 2000, and subsequently filed reports); and other risks that are described from time to time in Compaq’s Securities and Exchange Commission reports (including but not limited to the annual report on Form 10-K for the year ended December 31, 2000, and subsequently filed reports). If any of these risks or uncertainties materializes or any of these assumptions proves incorrect,HP’s and Compaq’s results could differ materially from HP’s and Compaq’s expectations in these statements. HP and Compaq assume no obligation and do not intend to update these forward-looking statements.